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Cyber Criminals Tapped Off One Tenth of Funding Raised by ICOs, Worldwide

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Published on : Feb 07, 2018

Through initial coin offerings (ICO), startups across the world have raised nearly US$4 bn by issuing digitized tokens in place of funding via crypto currency. However, over 1/10th of that, or US$400 mn, has been tapped off by cyber criminals. Ernst & Young, a professional services enterprise, assessed more than 370 ICO projects and found out that over 10% of the incomes were captured and stolen by hackers. Also, there have been several instances of data leaks where hackers gained access to information of investors provided to coin issuers.

Initial coin offerings or ICO is a non-regulated method of crowd funding a new company. Founders generate money by issuing digital coupons in exchange for crypto currencies without the need to transfer any equity. Now, investors can utilize these coupons to avail services of the startups in future. Several new crypto currency ventures are also raising funds using this method. One of the benefits of ICOs is that the issuers can evade the rigorous capital-raising procedures associated with the conventional route.

To participate in an ICO, generally, participants have to register themselves by providing their name, email IDs, and password. They are also required to provide with their ETH wall address, where they will be collecting the tokens. In January 2018, Experty, a voice and video calling app on the blockchain, was hacked and led to a massive loss of such data. "Startups want to gain billions but do not want to spend a penny on security,” said Indrajeet Bhuyan, a security researcher and tech blogger.

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